Question

A security with a periodically adjustable interest rate is typically known as a:

a. sinking fund
b. zero coupon
c. floating rate bond
d. convertible preferred stock

Answer 1

A security with a periodically adjustable interest rate is typically known as a floating rate bond.

Step-by-step explanation:

A security with a periodically adjustable interest rate is typically known as a floating rate bond. Unlike fixed-rate bonds, where the interest rate remains constant throughout the term of the bond, floating rate bonds have interest rates that are periodically adjusted based on changes in a reference interest rate, such as LIBOR (London Interbank Offered Rate) or the US Treasury rate.